Why Sell Wrigley, You Ask?
There's been a lot of talk lately about the potential sale of Wrigley Field to the state of Illinois. Many seem to be wondering why Sam Zell would risk devaluing the Cubs by selling its most valuable asset. The answer is simple...and obvious; more money.
While searching for the answer last night, I stumbled across the writers at Field of Schemes, who, in my humble opinion, are doing the Lord's work. It's been my long-held opinion that public subsidized stadiums are nothing more than corporate blackmail. The owners ask the state or local government to pay for their stadium. In return, the team won't move...how nice of them. The Field Of Schemes authors have a book whose subtitle explains it best: How the Great Stadium Swindle Turns Public Money into Private Profit. Bingo! The octogenarian's in Florida have it right though, don't pay. In most cases, the teams need the city and its population more than the city needs the team (except Green Bay which I'm certain would be swallowed up by the Earth if the Packers left).
But how does this all relate to the Wrigley Field situation, you ask? The Chicago Reader explains what some of the reasoning might be behind Zell's plan (link found via Field of Schemes):
... the old Tribune Company planned an ambitious expansion including a parking garage and a mall. Under the new proposal the Illinois Sports Facilities Authority—a state agency formed to subsidize the replacement for Comiskey Park, U.S. Cellular Field—would pick up the tab for those renovations. The Cubs would sell the park to the agency for the nominal sum of $1, and the new owners would sign on to rent the park from the state for at least 30 years. In exchange the Sports Facilities Authority would issue bonds to cover reconstruction costs.
$1? How is Zell going to make money by selling the stadium for a single dollar?
Simple: with the state underwriting the cost of updating the park, borrowing at lower rates than a private company could, the baseball team becomes a much wiser investment. The improvements—luxury boxes, added seats, a parking garage (details haven’t been worked out yet, Thompson says)—up the ante as well.
The new owners may also save on property taxes:
In addition, if the state owns Wrigley Field, the new owners won’t have to pay property taxes on it. In 2007 the Tribune Company paid $1,151,487 in property taxes on Wrigley. This year the bill will go up to around $1.43 million. At the rate property taxes are soaring, the new owners are looking to save more than $50 million in property taxes over the course of the 30-year lease.
They've been on top of this story at Field of Schemes from the beginning and noted Mayor Richard Daley's initial reaction, "taxpayers helping out the Cubs ... They've made money every year. It's very profitable and some way, we're supposed to bail them out?" The Chicago Reader speculates that Zell may have overplayed his hand by not going through Daley first, but rather Governor Blagojevich. But at the end of the article is this ominous prediction:
My sources in the statehouse predict that Daley’s opposition will only be temporary. They expect the mayor to swap his support for the Wrigley Field deal in exchange for a Chicago casino and more state funding for the 2016 Olympics.
Lo and behold, Daley just a few days later, "I have an open mind. . . . I always have an open mind on an issue. And why not? You should have it."
Right at this moment, you might be wondering about the article that Cubnut brought up mentioning prospective buyers faltering interest level if Wrigley Field and the Cubs are split apart. While I'm sure those anonymous quotes are accurate, I doubt their importance. I doubt that Sam Zell doesn't have a pretty good idea about who will buy the team at this point and doesn't have a pretty good idea that they're all for a plan that will grease the new owners pockets with some taxpayer money. And I doubt that Zell wasn't fully aware of one prospective ownership groups experience in obtaining public subsidies to help finance their stadiums. So while all of us armchair owners second-guess the real estate decisions of a man worth $4.5 billion dollars, it's best to remember that Zell made most of that money through real estate. I think it's possible he has a firm grasp on how selling Wrigley to the State will affect the sale of the Cubs. And even if Zell underestimates the money he can make from selling Wrigley to the State, I think Maury Brown stated it well at the end of the Crain's piece:
"There's no question this (stadium deal) would take away some luster for bidders," Mr. Brown says. "But the serious guys are going to stay because the Cubs are the Cubs. Huge bragging rights will go to whoever owns that team."
I did want to add that while I despise the entire concept of publicly subsidized stadiums, the idea of the state owning Wrigley Field doesn't bother me much. As mentioned, the new owner will have to sign a 20 to 30-year lease to stay at Wrigley, which is a good thing if you're a fan of the park (and if you're not a fan of the park, what is wrong with you?). And when a new owner realizes the difficulties in generating revenue in a 40,000 seat stadium with limited luxury suites, they'll have a harder time getting approval to spray paint a Nike logo into the ivy.
I've been pretty harsh with Lester here at various times but that's how it is when you pull in that kind of money, and besides, it's not like he reads my posts or would care what I have to say if he did read them for some reason. If I was him, the first thing out of my mouth would be, what level have you played this game at, pal?
Anyway, he's really looked good lately, and overall his body of work turned out pretty good, too. I'm glad his worst struggles were in April. This is such an easy team to like that I even like the overpaid free agent.
Gordo's lede today:
ST. LOUIS – Whether it’s a year early or right on time, Jon Lester’s $155 million moment arrives just after 5:45 p.m. Friday.
*checks pulse again*
Who are you? Andy Rooney?
Colbert has our backs
K-DUB: I get a chance to see the other MLB clubs Player Development operations out here and I have talked to scouts and other baseball people about it, and I can tell you that the Cubs Player Development program has gone from being almost a joke to one of THE best.
how did ej martinez go from asking for $10m, to supposedly mulling over $7m offers, to eventually signing for $3m?
...and what happened with him and the giants a few days ago?
Its not official until AZ Phil adds him to the Cubs Depth Chart!
Just freakin love it!
From Keith Law:
This from a Kiley McDaniel chat a couple weeks ago...
"Comment From Wrenzie
Who has more ceiling between Yusniel Diaz or Eddy Julio Martinez?
Kiley McDaniel: Martinez. I have Eddy (20 years old) as a 65 runner with a 55 arm and 50 raw power that profiles as an everyday CF that could be above average depending on if the bat is a 45 or a 55. I have Yusniel (19) as a 60 runner with a 55 arm and 40 raw power that can be an everyday guy if he hits enough (50 or 55)."
"Per Jesse Sanchez at mlb.com, Cubs reportedly have signed 20-year old Cuban OF Eddy Julio Martinez for $3M bonus.
Arizona Phil 7 hours 23 min ago"
it's day old news, and it's got nothing to do with the cubs, but ichiro signed a $2m deal with MIA (with a $2m option for 2017).
neat. 41 years old and damn close to 3000 hits.
also, rain delays suck.
take that giants
I think that if a team objects to the 1-game wildcard playin game so much, they could just win the pennant and avoid themselves the trouble.
Per Jesse Sanchez at mlb.com, Cubs reportedly have signed 20-year old Cuban OF Eddy Julio Martinez for $3M bonus.